Today’s Headlines

• ASX 200 rises 68 points to break 5900 to close at 5909.
• High 5913 Low 5863. Strong volume.
• Results focus and look good. Super Thursday.
• Banks push higher but resources the stars. BHP and RIO shine.
• CBA under a cloud.
• Metal prices climb higher in Asia. Copper at a 10-week high.
• TLS calm and solid.
• Barnaby takes leave.
• Jobs numbers in line but F/T P/T volatile.
• AUD stronger on jobs data at 79.40c
• Bitcoin rallies hard to US$9,660.
• AUD Bullion around $1354. Producers rejoice.
• US futures continue rally up 100 points.
• Asian markets boom though China closed for New Year. Nikkei up 1.59% KOSPI up 1.11%.

STOCK STUFF

Movers and Shakers

• MLX +9.52% copper price rises.
• BHP +4.56% strong commodity price rises.
• BLD +1.49% market warms to results.
• WHC +5.91% strong commodity price rises. Results tomorrow.
• CDD +2.50% director appointment.
• DMP -7.53% broker downgrades takes slice out.
• IPH -19.92% profit miss.
• FBU -1.81% negative broker comments.
• TCL -1.55% bond proxy stocks under-pressure.
• BIG +19.58% confidence returns.
• GBT +5.19% broker upgrades.
• ARV +11.76% high grade gold results.
• KDR +4.97% GXY +4.49% lithium back.
• LIC +4.38% positive reaction to results yesterday.
• AWC +4.04% FMG +5.69% resource rally.
• Speculative stock of the day: Service Stream (SSM) +26.09% Positive results out after hours yesterday. EBITDA up 10.4% Buy back announced and 3c dividend.
• Biggest risers – MLX, RSG, ORG, KDR, WHC and BPT.
• Biggest fallers – IPH, DMP, EWC, HSO, S32 and NXT.

TODAY

• Telstra (TLS) +0.58% 1H net profit A$1.7bn, down 4.9% on the pcp. 1H revenue A$12.91bn, up 0.8%. EPS 14.3c, down 3.4%. Operating expenses A$9.4bn, up 10.6%. If you excluded the impairment charge for Ooyala, NPAT was up 9.5% and EPS up 12.2%. The company announced an interim dividend of 11c. Mobile sales revenue grew by 0.8% to a$5.1bn. Retail hand-held customer services revenue increased by 235,000. Mobile broadband revenue declined by 8.6% to A$470m despite an increase in customers. Mobile hardware revenue grew by 8.2% to A$1.2bn including a strong demand for iPhone X and iPhone 8 devices. Fixed revenue declined by 8.3% to $3bn impacted by increased rate of nbn migration competition. have been dented by its video streaming foray.
• Origin (ORG) +6.86% 1H net loss of A$207m versus pcp loss of A$1.56bn. 1H underlying profit of A$428m versus A$173m. The company says FY outlook for energy markets has improved. Guidance was reaffirmed, and forecasts FY energy markets underlying EBITDA of A$1.78bn – A$1.85bn; capital expenditure of A$360m – A$420m; is on track to reduce net debt below A$7bn by end FY18; and affirms guidance for its share of APLNG production of 245-265 Petajoules. No interim dividend to be paid.
• Sonic Healthcare (SHL) -1.82% 1H net profit A$228.6m, up 16% on the pcp. Revenue A$2.6bn, up 8%. EPS 54.1c, up 15%. Margin expansion of 20bp. The company says it’s on track to achieve FY earnings guidance and says it will benefit from a A$20m US tax law change. Its European operation are experiencing strong organic revenue growth. German revenue growth of 20% included the Laboratory Bremen and Staber Lab Group acquisitions. And its contract win in the UK, to provide lab services to Barnet Hospital and Chase Farm Hospital in London, is set to yield over £12m in annual revenue. The company declared an interim dividend of 32c, up 3.2%.
• Healthscope (HSO) – 4.81% 1H net profit A$77.5m, down 13% on the pcp. Group revenue up 4.9% to $1.2bn. Hospital revenue up 5.9% to $1.1bn. The decline in EBITDA was due to softer private hospital market conditions, one-off planned brownfield expansion disruptions, and the performances of Holmesglen Private and Frankston Private. An interim dividend of 3.2c was declared. HSO says it expects 2H operating EBITDA to continue into FY19.
• Suncorp Group (SUN) – 2.40% said its interim net profit fell 15.8% to $452m from $537m a year ago after taking a hit from the Victorian hail storms and ploughing money into strategic programs like its controversial marketplace strategy. This was slightly above forecasts from Citi analyst who were tipping NPAT to sit at $488m.
• South32 (S32) – 5.41% 1H net profit US$543m, down 12%, underlying earnings US$544m, up 14%, net cash balance of US$1.4bn. Group output volume to be marginally higher in the second half. The company said its separation with South Africa energy is ‘well advanced’. It will pay an interim dividend of 4.3c, and a special dividend of 3c. It also announced a US$93m share buy-back. Market loves special dividends and buy backs. Guidance has been reaffirmed but the Appin operations are still challenging.
• ASX (ASX) – 3.38% Said its first-half net profit rose 5.1% to $230.5m. Revenue for the six months ended December 31 climbed 7.8% to $501.5m. ASX will pay a $107.2c interim dividend on March 28 to shareholders of record on March 8. Looks solid. Stock has fallen back in the recent sell off. May be time to have another look.
• 3P Learning (3PL) +18.57% 1H net profit more than doubles to A$4.8m, up 155%. Underlying core EBITDA A$10.3m, up 21%. Net debt of $16.5m with no term debt expected at end FY18. The company said it has completed year one of its three-year strategic plan, and this year plans to strengthen its product portfolio around maths and literacy and complete the implementation of its automated digital sales, service and marketing platform. It will not pay an interim dividend.
• Breville Group (BRG) +5.31% Net profit after tax of $36.3m up 7.8% with a one-off reduction in its US deferred tax assts. Revenue rose 13.6% to $385.4m Interim dividend of 16.5c.

• Evolution Mining (EVN) +2.15% said its interim net profit fell 10% to $122.52m from $136.67m. Revenue rose 10% in the six months ended December 31 to $782.14 m from $711.15m. Evolution reduced all in sustaining costs to a record low of $785 an ounce, a decrease of 20% on the previous period despite a 4% fall in production to 407,459 ounces.
• HT&E (HT1) +13.14% – the company formerly known as APN News & Media – said its net loss after tax for the full year widened to $117.5m from a loss of $6m in the previous year.

• McGrath (MEA) – trading halt – Reported a $25.51m loss from a $2.71m profit in the year-earlier period, weighed down by a $22m impairment of its company-owned sales segment. The results were worse than the earnings guidance it provided on January 22, that is, it would make a small loss of $50,000 and $1.6m in EBITDA. The stock is in a trading halt pending an announcement about John McGrath. Interesting.
• GrainCorp (GNC) +4.09% Said it expected to post an underlying net profit of between $50m to $70m in the 12 months to September 30. This compares to $142m in 2017. It expected underlying earnings before interest tax and depreciation of between $240m to $265m, down from $390m in 2017.
• Nextdc (NXT) -3.38% Another twist in the AJD data centre saga with the REIT company receiving an unsolicited non-binding approach to take the three call centres over for $280m. NXT had previously walked away from a $300m and AJD has advised it had given NXT first right of refusal.
• Qantas (QAN) +3.78% Standard & Poor’s says the company will have to significantly boost investment in aircraft just as it may have to resume paying company tax in 2020.

ECONOMIC NEWS

• Unemployment numbers out this morning. Jobs rose 16500 with the headline rate of 5.5%. Huge volatility in the full-time part-time split.
• Headline was in line with expectations, but F/T P/T is crazy. Full-time employment decreased 49,800 to 8,460,900 and part-time employment increased 65,900 to 3,992,600.

Not sure these numbers reveal much except that the RBA is hold. Big fall in F/T will stay the RBAs hand. If it is to be believed.

BOND MARKET UPDATE

ASIAN MARKETS

• Year of the Dog starts with markets closed.
• Chinese authorities have confirmed the first human case of H7N4 avian influenza in the coastal province of Jiangsu.

EUROPE AND US MORNING HEADLINES

• Another tragic US school shooting. 8 so far this year.
• Zuma quits as SA PM.
• Wells Fargo has struck a deal to sell its banking assets in Puerto Rico for about $1.7bn to Popular, the Caribbean island’s biggest lender.
• Teva had a great night in the US as Buffett has taken a stake in the company.
• In the UK, the average private sector employer expects to give staff an extra 3.1% this year, according to the Bank of England. first time pay settlements have broken through the 3% level since the GFC. Recruitment difficulties are at their highest level since 2004.

Finally…..

Best blonde joke you’ll ever read! 

Two sisters, one blonde and one brunette, inherit the family ranch.   Unfortunately, after just a few years, they are in financial trouble..

In order to keep the bank from repossessing the ranch, they need to purchase a bull so that they can breed their own stock.

Upon leaving, the brunette tells her sister, ‘When I get there, if I decide to buy the bull,  I’ll contact you to drive out after me and haul it home.’

The brunette arrives at the man’s ranch, inspects the bull, and decides she wants to buy it. 

The man tells her that he will sell it for $599, no less. 

After paying him, she drives to the nearest town to send her sister a telegram to tell her the news.. 

She walks into the telegraph office, and says, ‘I want to send a telegram to my sister telling her that I’ve bought a bull for our ranch. 

I need her to hitch the trailer to our pickup truck and drive out here so we can haul it home.

The telegraph operator explains that he’ll be glad to help her, then adds, it will cost 99 cents a word. 

Well, after paying for the bull, the brunette realizes that she’ll only be able to send her sister one word.

After a few minutes of thinking, she nods and says, ‘I want you to send her the word ‘comfortable.’

The operator shakes his head. ‘How is she ever going to know that you want her to hitch the trailer to your pickup truck and drive out here to haul that bull back to your ranch if you send her just the word’comfortable?’

The brunette explains, ‘My sister’s blonde. The word is big. 

She’ll read it very slowly… ‘com-for-da-bul.’   

 

Thanks Hans ..a classic

 

Have a lovely evening

Clarence

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